Petroleum related FDI, local conditions and poverty reduction - the Macae region of Brazil

The main aim of my study is to determine if petroleum related foreign direct investments (FDI) in the Macaé region of Brazil can be characterized as a "tool for poverty reduction". The theory section discusses FDI, local conditions and poverty reduction. Regarding the effects of FDI on host regions, theories are divided into those that see "FDI as development" and those that view "FDI as dependency". In spite of these contrasting views, there is general agreement that natural resource based FDI (e.g. petr oleum) does not contribute to economic growth, positive spillover effects, development and reduced poverty in host regions. However, several factors influence the effect of incoming FDI and I argue that, as with other types of FDI, petroleum related FDI c an also generate different outcomes for the region in which it is invested. The outcome depends on different local conditions, policy-making etc. A model showing the interactions between FDI, local conditions and poverty reduction has been developed based on the theory discussion, and will be tested during the research period. The study area, Macaé, is different from most empirical examples. Economic growth in the region is proved, and there are indicators that FDI has also had an effect on poverty reduct ion, with positive socio-economic development. Collection, treatment and analyses of different types of qualitative and quantitative data will form the basis for drawing conclusions about the effect petroleum related FDI has had on the development of the region. Can reduced poverty in the region be attributed to this type of FDI (directly or indirectly)? Through analysis of data and assessment of the processes and conditions existing in the Macaé region, I will be able to place this case within the contex t of theories concerning FDI and poverty reduction. If FDI has led to poverty reduction in the region, what recommendations can we offer to make FDI more effective as a tool for poverty reduction on a wider basis?